Resistance
Technical Analysis
Resistance is a price level where selling pressure has historically been strong enough to halt or reverse an advance.
What is resistance?
Resistance is the mirror image of support: a price zone where a rising market has repeatedly struggled to push higher because sellers have consistently stepped in. It acts like a “ceiling” — not an absolute barrier, but a level where supply has historically outweighed demand. Resistance often forms at a previous swing high, a psychological round number, or near a technical indicator like a long-term moving average.
How resistance forms
Resistance builds the same way support does, just in reverse. Traders who bought earlier and are sitting on a small profit may look to sell (take profit) as price approaches a prior high, while short-sellers may see the same level as an attractive place to open new positions. Each rejection at that level reinforces its significance to other chart-watchers.
Example
If USD/JPY rallies to 155.00 twice within a few weeks and pulls back both times, traders following technical analysis would mark 155.00 as resistance. A trader might consider a short position near that level, with a stop-loss placed just above it in case the level fails to hold.
Breakouts through resistance
When price finally pushes through resistance with conviction — often on higher trading volume — that is called a breakout, and it frequently signals the potential start of a new upward leg. As with support, a broken resistance level often becomes new support afterward, since former sellers who were trapped may now look to buy back on a retest.
Why it matters
Identifying resistance helps traders plan take-profit targets, decide where NOT to chase a rally, and spot potential reversal or breakout setups. Like all technical levels, resistance is a probability tool, not a guarantee — it can fail, and traders should always manage risk with appropriate stop-losses and position sizing.